Team Management

How Do I Create an Employee Handbook?

Gusto Editors  
How small businesses can create an employee handbook .

Questionable T-shirts, work-from-home policies, and unlimited questions about unlimited vacation—an employee handbook is the manual you need to solve any of those perplexing situations.

In this article, we’ll show you how to create an employee handbook from scratch.

But first, let’s dig into two of the biggest questions employers have.

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Is my company required to have an employee handbook?

No, your company is not required to have an employee handbook. However, here are some reasons why you want to create one anyway.

  • Legal protection: A well-written and well-followed handbook will pack a serious punch in any legal proceedings. It’s evidence that your company doesn’t discriminate and knows and follows federal and state laws.
  • Compliance: Having an employee handbook can help you satisfy a bunch of state requirements. There aren’t any federal requirements for having an employee handbook, but many policies can vary dramatically from state to state. And in each state, there are special notice requirements that can often be met by slipping a carefully written policy into your handbook.
  • Company culture: An employee handbook is the first step in building a great company culture. Nearly 90 percent of small employers believe that promoting a community feeling at work is key to their success. Let your culture radiate inside all the policies you’re so thoughtfully putting together.
  • Communication: An employee handbook opens up the lines of communication with employees. With everything neatly laid out in one central place, employees can go straight to the person in charge or the exact document they need.

What’s typically in an employee handbook?

An employee handbook typically contains:

  • The story of your company
  • A statement on the relationship between your employees and you, the employer
  • Legally required workplace notices and policies
  • Other policies you want to spell out but aren’t required

How do I write an employee handbook?

A good employee handbook protects you from possible liability while keeping your employees excited to come to work. 

Whenever your employees have a question about a work-related policy, they should be able to turn to their employee handbook to dig up an answer.

Step 1: Set the stage

Before getting into the subject matter, make your employees feel stoked to be a part of your journey. Talk about your history, mission, and company values. Then, any other color that will bring your story to life. Have a hilarious anecdote? Drop it right in.

Make it a point to write your handbook in a straightforward and fluid way that’s full of examples and stories. You want people to quickly understand everything they’re reading and feel proud to be a part of the company’s culture, story, and growth.

A good handbook isn’t just about what not to do—it should also carve a path for those who want to “do.” 

Step 2: Lay out the basics

This is where your story takes shape. In this section, it’s important to talk about what your team can expect from you and what you can expect from your team.

Before you begin, check out your state’s labor website to give you a rundown of all the policies you need to address from the get-go.

Step 3: Add the stuff your team cares about

Once you make it through the items above, pepper in anything else that matters. These can include things like flexible work arrangements, social media policies, parking, cell phone usage, your dress code, and anything else that’s important to your team.

For even more advice, check out the employee handbook examples and templates below.

Step 4: Get sign-off

Once you have a draft of your employee handbook, run it up the HR flagpole and get it in front of an employment lawyer so you can be extra sure you’re not missing anything crucial.

Then it’ll be time to get your employees’ signatures. The final page of your handbook should be an acknowledgement form that employees sign to signal their understanding of your policies.

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Step 5: Keep it up to date

Employment laws frequently change, so you’ll need to stay on the ball to make sure your handbook is written to address new laws.

That means you should have a lawyer or HR consultant review your handbook every six to 12 months.

And if you do make any changes to your handbook, make sure to have your employees sign new acknowledgment forms. The process of getting their signatures will help draw attention to any changes in your policies, and it can help prove they knew of any changes if you ever wind up in a dispute.


You’re now well on your way to becoming an employee handbook pro. Bust out those pencils and policies, and let the handbook creation begin.

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